FISCAL YEAR 2013 CORPORATE RESPONSIBILITY & SUSTAINABILITY REPORT
HOME TABLE OF CONTENTS
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A Letter From Extending the Listening to Supply Chain Governance Helping People GRI Index Our CEO Life of Technology Our Employees Transparency For & Ethics Succeed Through Exclusive Brands Technology Report Overview A Global Learning, Public Policy Responsibility Development Audit Results U.S. & Global About This & Rewards Stakeholder Programs Report Helping Customers Our Vendors Engagement Choose Sustainable A Culture of & Supplier Employee Products Diversity & Inclusion Diversity By The Numbers Volunteerism
Providing Our Operations Awards and Entertainment in a Recognition Responsible Way Reducing Our Carbon Footprint Exclusive Brands
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I spent my first week at Best Buy on the sales floor, proudly Continue leadership role in positively impacting our world and wearing a blue shirt. I experienced, firsthand, what an incredible making it a better place. We will provide learning opportunities company Best Buy is and the extent to which the products through technology and lessen our environmental impact in the and services we provide our customers can have a meaningful communities we serve. impact on their lives. We aspire to maximize our performance in relation to all As a company, we have great strengths. We are the market of our stakeholders – customers, employees, vendors, leader in Consumer Electronics and have a powerful platform shareholders, communities, the environment and governments. from which to deliver a superior multi-channel shopping Our view is that it is not a tradeoff. Renew Blue is the framework experience and impartial, knowledgeable advice to our in which we will rejuvenate and revitalize our great company customers. AND be a good corporate citizen.
As focused as we are on our business transformation, called Best Buy’s mission is to be the preferred authority and Renew Blue in honor of the blue shirts worn by our sales force, destination for technology products and services. The energy we also want to be a good corporate citizen. With this in mind, in the organization around the successful execution of our we embedded in the Five Pillars of Renew Blue elements of Renew Blue initiatives is inspiring. Our commitment to all our our determination to integrate sustainability in our business stakeholders is to make Best Buy thrive again and to do that in a wherever possible. Those Five Pillars are: responsible way – a way consistent with our past successes and future promise. Reinvigorate and rejuvenate the customer experience. We are seeking to put the customer at the center of what we do, Sincerely, addressing their needs and providing unique value to them. A Letter From One of the ways we do this is by helping our customers extend 01 Our CEO the life of their technology, in part through our Trade-in and recycling programs.
Attract and inspire leaders and employees to deliver extraordinary results for all our customers through rigorous Hubert Joly training, authentic listening and an inclusive culture. President and Chief Executive Officer Best Buy Co., Inc. Work with vendor partners to innovate, drive value and mitigate risk in the supply chain.
Increase return on invested capital (ROIC) for investors through our strong corporate governance and ethics.
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Report Overview
THE PILLARS OF
Welcome to the Best Buy 2013 Corporate Responsibility and Sustainability (CR&S) Report. Best Buy’s mission is clear: to be the preferred authority and destination for technology RENEW BLUE products and services. Our corporate citizenship activities are woven into how we do business and our Renew Blue transformation plan reflects those same ideals. Reinvigorate and rejuvenate the CUSTOMER EXPERIENCE
In this report, you will see many examples of how we bring our CR&S strategy to life for each of the stakeholder groups touched by our Renew Blue pillars. For instance, our electronics Attract and inspire LEADERS AND EMPLOYEES recycling program, which is the most comprehensive in U.S. retail, delivers on our pledge to customers to provide support throughout the life of the products we sell. And, our positive impact on the communities we serve is highlighted by our efforts to bridge the digital divide Work with VENDOR PARTNERS to innovate and drive value for teens, our employee volunteerism and our community giving.
Through this report, we share our CR&S strategy and goals as well as progress we have Increase ROIC for INVESTORS made toward those goals. As an example, we have pledged to collect 1 billion pounds of consumer electronics for recycling by the end of 2014. We are well on our way to meeting this goal and will be updating our commitment in this next fiscal year. Continue leadership role in positively impacting OUR WORLD
While we have made great progress over the past several years, we know that we have more work to do. Whether it is working with our vendor partners on supply chain matters, we are focused on reinvigorating and rejuvenating the customer experience or creating strong training programs for our employees, we believe our efforts in CR&S, aligned to our Renew Blue transformation, will positively impact our world. In addition to At Best Buy, we promise our customers: this report, please visit our website, sustainability.bby.com, throughout the year, where we will post our progress as well as sustainability stories from across the Best Buy enterprise. • The latest devices and services – all in one place • Knowledgeable, impartial advice • Competitive prices • The ability to shop when and where our customers want • Support for the life of the products we sell
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About This Report
REPORT SCOPE FINANCIAL HIGHLIGHTS
This report covers 99 percent of our business. It covers all Best Buy-branded stores Our financial results for fiscal 2013 represent an 11-month transition period based on globally and our major subsidiaries, including The Carphone Warehouse and The Phone our new fiscal year-end, compared to fiscal 2012 and 2011, which include 12 months of House stores in Europe; Five Star Appliance stores in China; and Future Shop stores in activity based on our prior fiscal year-end. In addition, the financial highlights for revenue Canada. Recently, we announced the sale of our 50% interest in Best Buy Europe, the joint below are presented for continuing operations only for all periods. venture we created in 2008 with Carphone Warehouse Group plc (CPW). In this report, our overall numbers for the business overview tie to our 2013 Annual Transition Report on STORE DEVELOPMENT Form 10-K which includes Best Buy Europe. However, we have removed CPW programs from the narrative sections. Occupancy cost reductions continue to be a key focus. In fiscal 2013, we closed 47 large-format U.S. Best Buy stores and expect to close an additional 5 to 10 large-format GLOBAL REPORTING INITIATIVE U.S. stores in fiscal 2014. In addition, we are planning to move forward with new stores in a small number of selected and opportunistic U.S. markets, including 12 new Best Buy We continue to follow the Global Reporting Initiative (GRI) process in our sustainability Mobile stand-alone stores, 10 Magnolia Design Center (store-within-a-store), and 18 to report. We believe the GRI framework provides a sound foundation that enables 25 Pacific Kitchen and Home (store-within-a-store). In our International segment, we will stakeholders to compare reports across time periods, companies and industries. In continue to review our portfolio of stores across all geographies. preparing our report, we have included GRI metrics relevant to our business. For the third year in a row, we are self-declaring GRI Application Level B. Additional information on GRI standards and application levels can be found at www.globalreporting.org. Select content of the report was verified by our internal audit team for assurance.
CHANGING FISCAL YEAR
Beginning in fiscal 2013, we changed our fiscal year-end from the Saturday nearest the end of February to the Saturday nearest the end of January. As a result of this change, fiscal 2013 was an 11-month transition period and ended on February 2, 2013. WE WANT YOUR FEEDBACK contact us with questions, concerns or feedback on this report or any of the programs contained within please e-mail [email protected]
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BEST BUY® By The Numbers
EMPLOYEE COUNT STORE COUNT
PART-TIME FULL-TIME
UNITED STATES 66,510 55,862 1,056 409 34 4
CANADA 8,864 8,161 72 49 140
MEXICO 989 669 14
EUROPEAN 6,626 8,864 872 1,517 RICHFIELD UNION
MINNESOTA, USA CHINA N/A 8,653 211 Our world headquarters 165,000 45 BILLION total employees in total revenue1 for fiscal 2013 NYSE symbol: BBY 4,379 total stores
1. Revenue reported is for fiscal 2013 (11 months). Revenue provided is presented for continuing operations only. See our Annual Transition Report on Form 10-K for full financial disclosure.
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03 BEST BUY® Awards & Recognition in Fiscal 2013
Carbon Performance Leadership Index Carbon Disclosure Project
Carbon Disclosure Leadership Index Carbon Disclosure Project
Fortune 500 Green Ranking 3rd Among Retailers 23rd Overall Newsweek Magazine
Dow Jones Sustainability Index Dow Jones
Employer Of The Year Autism Society
Nation’s Leading Green Power Purchaser 8th Among Retailers 30th Overall 15 th Among Fortune 500 U.S. Environmental Protection Agency
Best Companies For Hourly Employees Working Mother
Canada’s Top 50 Socially Responsible Companies Maclean’s
Outstanding Training Initiative Award Training Magazine
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Reinvigorate and rejuvenate the customer experience
Extending the Life A Global Helping Providing Exclusive 01 of Technology 02 Responsibility 03 Customers 04 Entertainment in 05 Brands Choose a Responsible Way Sustainable Products
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Extending the Life 01 of Technology PRODUCT LIFECYCLE
At Best Buy, we want to help consumers give their GET IT NEW electronics a longer life or Our Customer Specialists help offer a destination where they you make the right choice. can be properly disposed of safely and responsibly. This helps us work toward RECYCLE achieving our industry-leading Our partners break it down goal of reducing e-waste into commodities, which are used to create new products. and providing lower-cost technology options for our USE & ENJOY Geek Squad® is there to set customers. it up, protect it or repair it.
REFURBISH Trade IN Whenever possible, devices We give you a gift card are refurbished for reuse. for eligible items.
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01 Extending the Life of Technology
A CLOSER LOOK: PRODUCT LIFECYCLE
Repair Refurbish PartStore Trade-In Our Geek Squad® Repair service not At Best Buy, we manage a portfolio of We have invested in one of the most in- The Best Buy Trade-In program helps only extends the life of products, thereby refurbished products, providing our depth parts catalog in the repairs industry, customers afford new technology. It is saving our customers money, it also customers opportunities to purchase these with nearly five million new and used parts unique in that we provide instant value reduces the amount of electronics going products – either at our stores or through available to technicians and customers in through a gift card for gently used into the waste stream at any one time. secondary markets. Our customers the United States and Canada, including technology that can be re-sold, and we save money by purchasing refurbished access to parts taken from non-working allow customers to perform a trade-in products and help to keep functional units. We call this our PartStore. either in store or online. electronics out of the waste stream.
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A Global CHALLENGE: E-WASTE 02 Responsibility Electronic waste continues to be one of the fastest growing waste streams on the planet and improper recycling and disposal is a worldwide problem. Solving the e-waste problem is important because it reduces the need for more landfills, prevents pollution caused by the mining and processing of raw materials and conserves such natural resources as trees, water and minerals. Despite industry efforts to offer more recycling programs, the amount of electronics When there isn’t an option to recycled continues to be low and has not changed much in recent years. re-purpose a product, we provide customers a place to To address this issue, we established our recycling program in 2008. In the U.S., consumers recycle more electronics recycle their electronics. through Best Buy than any other retailer. We set a U.S. goal to collect one billion pounds of consumer electronics and appliances for recycling by the end of calendar year 20141. To date, we are on target to meet this goal, having collected more than 700 million pounds of consumer electronics and appliances. In fiscal 2013 alone, we collected about 96 million pounds of consumer electronics and 77 million pounds of appliances.
IN NORTH AMERICA WE RECYCLED 176.8 MILLION POUNDS of consumer electronics and appliances in fiscal 2013
1. Our goal to recycle one billion pounds of consumer electronics and appliances in the U.S. began in June 2008 and ends in December 2014.
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02 A Global Responsibility
OUR GOAL Recycle 1 billion pounds of e-waste by 20141 1 BILLION POUNDS
x 50,000 x 4,000
= =
1 billion POUNDS 50,000 4,000 of recycled goods dump trucks GREAT BLUE WHALES
1. Our goal to recycle one billion pounds of consumer electronics and appliances in the U.S. began in June 2008 and ends in December 2014.
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02 A Global Responsibility ENSURING RESPONSIBLE RECYCLING
Challenge: Exporting Unfortunately, e-waste continues to be exported to developing countries, where it may be processed in unhealthy and often dangerous conditions. The demand for this material is due to the value of commodities contained in electronics. It is more expensive to properly recycle electronics in ways that protect human health and the environment, thus it is important for people to understand that they should only use certified recyclers when deciding where to recycle their old electronics. At Best Buy, we provide a responsible way for our customers to recycle their old electronics.
Our Recycling Standards To address this issue, at Best Buy, we promote environmental stewardship by requiring all of our recycling partners to comply with the highest standards in the industry regarding the reuse, refurbishment or recycling of products collected through our programs and the disposal of waste generated from the recycling process. In WE MEET & REQUIRE addition to our own standards, in fiscal 2013, we required certification by either R2® the highest industry standards or eStewards®, which are third party standards for responsible practices. for the reuse, refurbishment and We are a Gold-level participant in the EPA’s Sustainable Materials Management (SMM) Electronics Challenge. The mission of the SMM Electronics Challenge is to advance recycling of our products the responsible management of used electronics by challenging manufacturers and retailers of electronics to voluntarily commit to sending 100 percent of used electronics collected for reuse and recycling to certified third-party recyclers.
Customer Data Privacy and Recycling This is a very important issue for our customers and for our company. To ensure our customers’ data is protected when it leaves our facilities, we have strict data privacy protection requirements of our partners. We partner with only pre-qualified companies in our secondary markets and we regularly audit our recycling partners to ensure compliance with our data privacy standards.
Visit BestBuy.com/Recycling for more information about how to recycle electronics at Best Buy stores and our commitment to preserving our customers’ data privacy.
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ENERGY-EFFICIENT PRODUCTS Helping Customers 03 Choose Sustainable Products At Best Buy, we offer a large selection of energy-efficient products to help our customers around the world save money by using less energy, including products in Europe and China, that have their own government-managed energy-efficient rating systems. In the U.S. and Canada, we partner with the EPA‘s ENERGY STAR® program. U.S. Best Buy customers purchased more than 21 million ENERGY STAR® certified products in calendar year 2012 and realized utility bill savings of more than $51 million1. This energy savings equates to just over 680 million pounds of CO emissions avoidance 2, or the equivalent of removing more We want to provide consumers 2 a variety of product options and than 61,000 cars from the road 3. Learn more about U.S. ENERGY STAR® certified products at BestBuy.com/EnergyStar. the best information available so they can make sustainable CALENDAR YEAR 2012 ENERGY STAR® PURCHASES choices. PREVENTED 680 MILLION POUNDS OF CO2 from entering the environment
1. Savings based on Best Buy’s calendar year 2012 sales and the difference in U.S. Environmental Protection Agency’s ENERGY STAR Program data regarding annual unit energy consumption between non-ENERGY STAR certified products and ENERGY STAR certified products. Electricity rate is $0.1151/kWh.
2. Savings based on Best Buy’s calendar year 2012 sales and the difference in U.S. Environmental Protection Agency’s ENERGY STAR Program data regarding annual unit energy consumption between non-ENERGY STAR certified products and ENERGY STAR certified products. Emissions factors are 1.54 pounds CO2/kWh and 117 pounds CO2/MBtu.
3. Savings based on Best Buy’s calendar year 2012 sales and the difference in U.S. Environmental Protection Agency’s ENERGY STAR Program data regarding annual unit energy consumption between non-ENERGY STAR certified products and ENERGY STAR certified products. Emissions factors are 1.54 pounds CO2/kWh, 117 pounds CO2/MBtu, and 11,244 pounds CO2/car/year.
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03 Helping Customers Choose Sustainable Products
EPEAT® RATING SYSTEM IN GLOBAL COMMUNITIES
We also offer our business customers access to a helpful tool called EPEAT®, a green In China, beginning in June 2012, the government provided financial subsidies to electronics rating system that combines more than 50 environmental-performance stimulate the consumption of energy-saving products, mainly household appliances. criteria regarding design, production, energy use, product longevity and recycling with Five Star sold more than 2 million qualifying energy-saving appliances during fiscal 2013. ongoing, independent verification of manufacturer claims. Nearly 500 million EPEAT- registered products have been purchased since the system began in July 2006. U.S. PRODUCT SAFETY Best Buy customers purchased more than 1.5 million EPEAT-qualified products, which in energy savings, is the equivalent of powering nearly 15,000 houses for a year. With Ensuring the products we sell are safe for customers is essential to being a responsible the recent expansion of EPEAT into the imaging (printers and scanners) and television retailer. To stay apprised of regulatory issues and trends that impact our product- categories, and their historical presence in computing, we look forward to offering even safety program, we hold memberships in the Retail Industry Leaders Association more EPEAT qualified products in the coming year. (RILA) Product Safety Committee, the Consumer Electronics Association (CEA) Product Safety Working Group and the International Consumer Product Health and Safety Organization (ICPHSO). In our fiscal 2012 report, we introduced a potential solution for possible risks of children swallowing coin-sized “button” batteries found in common electronics products such as slim remote controllers, toys and games. Our solution, called the Disc Battery Pressure-Activated Cap, is now in patent-pending status and has been featured at several safety conferences. Another innovation we have in patent- pending status provides a potential solution for the issue of TV tip-over incidents. With 1.5 MILLION EPEAT® CERTIFIED PRODUCTS our solution, customers can secure their TV without using tools or putting holes in walls or furniture, and yet the solution still allows for TV angle adjustment. save enough energy to power
15,000 HOUSES FOR A YEAR
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Providing 04 Entertainment in a PROVIDING ENTERTAINMENT IN A RESPONSIBLE WAY Responsible Way At Best Buy, we are keenly aware of our role in managing mature content when it comes to minors. We want to give our customers the opportunity to choose what is appropriate for themselves and their families, and make our sales staff available to answer questions to help customers make informed decisions. When it comes to gaming and entertainment, customers Some of the video games we sell in our stores are M-rated (mature), and we take precautions to ensure they trust that our Blue Shirts are are only purchased by those ages 17 and older. Our registers prompt employees to ask for an ID when an knowledgeable in the latest M-rated game or R-rated movie is scanned for purchase. We use a mystery shopping program to routinely test and greatest. And by taking our stores’ performance of age verification. We actively work with the Entertainment Software Ratings Board extra precaution at checkout, (ESRB), which aims to increase awareness and use of the rating system by parents and other consumers. consumers can also rely on our knowledge of rating systems, ensuring their families are going home with age-appropriate gear.
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Exclusive 05 Brands
In addition to showcasing INNOVATING our vendor partners’ innovative products, we have FOR OUR CUSTOMERS our own in-house product lines with energy efficiency, In fiscal 2013, we unveiled an LED safety and other sustainable light bulb that uses 75 percent less attributes in mind. energy than incandescent bulbs and is Energy Usage designed to have a product life of more than 22 years. Developed by Cree, Inc. (NASDAQ: CREE), this Best Buy exclusive product was created in partnership with Minnesota inventor, Dave Carroll. Unlike other LED bulbs, the Insignia LED light bulb looks more like a traditional incandescent bulb, providing immediate full brightness when turned on. The Insignia LED light bulb also avoids the CFL toxic hazards and disposal hassles, since they are mercury- and gas-free.
The Insignia bulb is ENERGY STAR certified, making the product even more affordable for customers due to the Insignia LED Bulb Standard Incandescent Bulb rebate program. (Contact your local Best Buy store or utility company for rebate information.) Insignia bulbs are available for purchase on BestBuy.com and in all Best Buy U.S. large-format stores.
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05 Exclusive Brands
SUSTAINABLE PACKAGING
Our Exclusive Brands packaging team focuses on three priorities for improving packaging
“Optimal” Packaging Design In fiscal 2013, we continued the research of systems and tools to support and track packaging materials that will help us measure the benefits of packaging optimization. We continue to look for ways to make our packaging the most appropriate size for the product, while accounting for handling protection, regulatory requirements, assembly methods, retail merchandising and overall customer satisfaction. Our goal is to have 100 percent of Insignia, Dynex, Rocketfish and Init retail packages “optimally” designed to meet product requirements. OLD NEW
Safe and Sustainable OUR GOAL Our aspiration is to eliminate packaging materials that are considered toxic, or create challenges in the material-recovery processes. In fiscal 2013, we eliminated To have all of our retail packaging an additional 12 tons of polyvinyl chloride (PVC) plastic from our retail packaging “optimally” designed and more than 20 tons of expanded polystyrene foam from our Exclusive Brands TV packaging. Whenever possible, we choose paper-based materials rather than plastic, we eliminate or reduce PVC, we use post-industrial and post-consumer recycled cardboard, and we apply non-solvent coatings and organic inks.
Customer Education About Disposal We want to help our customers understand how to recycle or dispose of packaging materials. Exclusive Brands has joined GreenBlue’s Sustainable Packaging Coalition working group, and is partnering with its How2Recycle labeling initiative — a new and uniform packaging material and recycling coding system.
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Attract and inspire leaders and employees
Listening to Learning, Development A Culture of 01 Our Employees 02 & Rewards 03 Diversity & Inclusion
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Listening to 01 Our Employees
EMPLOYEE ENGAGEMENT
We use formal surveys to establish a baseline of employee satisfaction and identify areas to improve the employee Each year, we ask employees experience. The Employee Satisfaction Index (ESI) collects feedback from employees across the enterprise in the U.S., from across the organization Canada, Mexico and China. It gives us insight into 23 different dimensions of the workplace environment, accounting what they think about working for differences in local culture. The Best Buy overall employee satisfaction increased in fiscal 2013 from fiscal 2012. at Best Buy. And we believe that a continuous conversation CUSTOMER RELATIONS is an important way to gain IMMEDIATE SUPERVISOR EQUIPMENT feedback. We also believe TEAMWORK AND SUPPLIES that the key to practicing BENEFITS JOB DESIGN CAREER DEVELOPMENT authentic listening is to take CORPORATE RECOMMEND action on what employees COMMUNICATIONS OUR ESI OFFERS say. At Best Buy, we expect WORK COMPENSATION all of our leaders to build SCHEDULE insight into 23 dimensions WORKLOAD action plans with their teams of the workplace environment ACCOUNTABILITY to address their engagement LOYALTY INDEX levels collected from the COMMUNITY formal employee survey. INDEPENDENCE COMMITMENT INVOLVEMENT DIVERSITY AND INCLUSIVE ENVIRONMENT CHANGE MANAGEMENT PERFORMANCE APPRAISAL PROCESS TRAINING JOB SATISFACTION SENIOR MANAGEMENT
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01 Listening to Our Employees
A NEW VOICE AROUND THE WATERCOOLER GLOBAL TOWN HALLS
In fiscal 2014, we have transitioned to a new survey Watercooler is our online forum for employees to Senior leaders hold quarterly meetings where they share called eVoice, which measures engagement in addition engage in free and open dialogue on any Best Buy- a state-of-the-business update and progress on critical to satisfaction and is more aligned with our company related topic. initiatives. Employees across the globe can participate strategy. eVoice will provide deeper insights into and key via the web and ask questions via the webcast. drivers of employees’ engagement.
Watercooler
Town Hall Meeting eVoice
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Learning, 02 Development & Rewards
Through our broad training programs and emphasis on development, employees are motivated to share ideas and collaborate on business goals, resulting in an environment where Blue Shirts are leading PREPARING EMPLOYEES innovation. FOR SUCCESS
Comprehensive training is key to inspiring confidence in our employees to deliver an exceptional customer experience. In fiscal 2013, we received the Outstanding Training Initiative Award from Training Magazine.
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02 Learning, Development & Rewards
LEARNING LOUNGE REWARDING EMPLOYEES
We are committed as an organization to ensuring that no employee goes untrained. Path To Excellence In the U.S., we deliver product and service training to our employees through our Path to Excellence is our new performance recognition platform, whereby employees award-winning platform called Learning Lounge. The site includes training tools such can be recognized by leaders with points and awards for delivering great customer as videos and audio files, accessible anywhere with an Internet connection, so our experiences, or reaching business goals. Points can also be earned by demonstrating employees can learn where they like, when they like — and they are paid for their time. behaviors that support the strategic priorities of the enterprise as well as achieving Our employees completed more than 12 million courses during fiscal year 2013. milestone years of service awards. All of these points can be redeemed for items such as event tickets, merchandise, gift cards, travel, and Reward Zone certificates. LEARNING LOUNGE COURSES COMPLETED Similarly, as employees complete Knowledge Zone status levels (Bronze, Silver, Gold 12 million and Platinum) of their personalized learning path through Learning Lounge, they are FISCAL YEAR 2013 recognized with pins to wear to designate their level of proficiency.
7.15 million Part-Time Benefits FISCAL YEAR 2012 For part-time employees, Best Buy offers competitive pay and many of the same 4.3 million benefits and rewards that we offer to full-time employees. U.S. part-time benefits FISCAL YEAR 2011 include a 401(k) retirement fund, an employee discount at Best Buy stores and an Employee Assistance Program (where employees can go for help with personal issues). This year, we enhanced part-time health offerings with free flu shots, access to a nurse line and prescription drug discounts. In fiscal 2014, we have expanded our Short Term Incentive (STI) program to include all store employees. RESPONSIBILITY TO EVERYONE
One example of an e-learning that our new Rewarding Globally employees complete during their orientation Five Star rewards its employees through a similar program called Learning Passport. is “Responsibility to Everyone.” Employees take courses, earn points and exchange the points for gifts.
This course covers harassment prevention, Best Buy Mexico employees who have made a significant contribution to our business diversity and inclusion best practices and are recognized in their stores through a quarterly award called “La Pieza Clave.” respect in the workplace.
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EMPLOYEE DIVERSITY A Culture of Diversity & Inclusion 03 Our Employee Business Networks (EBNs) are the backbone of our diversity and inclusion efforts in the U.S. These groups are based on dimensions of diversity such as age, race, gender, abilities, military service, sexual orientation and gender identity.
PERCENT OF MINORITY GROUP MEMBERSHIP EMPLOYEES (U.S. ONLY) At Best Buy, we work to create FY ‘11 FY ‘12 FY ‘13 an environment that respects 15% and leverages the unique 14% 14% Hispanic Employees experiences and perspectives African American Employees 13% of our employees. In 12% 12% developing a diverse and inclusive workforce and Asian-American Employees culture, it is important that 4% 4% 4% all of our employees feel welcome and valued. FEMALE LEADERSHIP
One of the most active EBNs is the Best Buy Women’s Leadership Forum (WOLF), an engaged and inspired network of over 10,000 employees, customers, partners and friends that benefit the individuals in the network, our business and our communities. “WOLF Packs” are the center of the network, made up of retail and corporate employees (both female and male) who meet monthly to focus on leadership development and business innovation. We are proud to have been named to Working Mother’s list of Best Companies for Hourly Employees in fiscal 2013 for the second consecutive year.
PERCENT OF FEMALE EMPLOYEES FY ‘11 FY ‘12 FY ‘13 31% 31% 31% Enterprise U.S. Executives1 (VP and above) 32% 31% 30%
1. Percent represents January fiscal month end for 2011, 2012 and 2013
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03 A Culture of Diversity & Inclusion
SUPPORTING COMMON INTERESTS RECIPROCAL MENTORING
Growing in popularity, Focused Involvement Networks (FINs) are groups of Best Buy Now in its third year, the Reciprocal Mentoring Program pairs senior leaders with employees who share a common interest or passion. Examples are Facing Autism in a emerging leaders from one of our Employee Business Networks, where both play Caring Environment (FACE), the Best Buy Cycling Team and the Best Buy Racing Network. the role of mentor and mentee. The purpose is to leverage diversity to positively influence our employees, customers and communities. It also provides senior leaders and emerging leaders with leadership-development opportunities and contributes to retention of diverse talent. In fact, the retention rate of emerging leaders who participated in the program was more than 90 percent in fiscal 2013.
GLOBAL RATES OF EMPLOYEE TURNOVER 1 & RETENTION 2
FY ‘11 FY ‘12 FY ‘13 50% 50% 35% Total U.S. Turnover Total U.S. Retention 74% 63% 64% HUMAN RIGHTS STATEMENT Total Enterprise Turnover 3 48% 49% 37% At Best Buy, we recognize and embrace the responsibility to respect human rights in our own operations, as well as through our business At Best Buy, we know that higher levels of employee engagement correlates to lower relationships. levels of turnover, which is one reason that we strive for a highly engaged workforce.
We have long taken steps to meet this responsibility 1. Turnover represents the percent of employees who voluntarily ended employment at Best Buy during the fiscal year. through our Code of Business Ethics and our Supplier 2. Retention represents the percent of employees who remained employed at Best Buy for the entire fiscal year. Code of Conduct. We will continue to explore 3. Due to regional differences in reporting, the data does not include Carphone Warehouse figures. programs in this area.
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Work with vendor partners to innovate and drive value
Supply Chain Transparency Audit Our Vendors 01 For Best Buy Exclusive 02 Results 03 & Supplier Diversity Brands Products
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Supply Chain 01 Transparency For Best Buy Exclusive SOCIAL AND ENVIRONMENTAL Brands Products RESPONSIBILITY PROGRAM
From 2007 to 2012, the approach we used to monitor suppliers’ management practices was called the Social and For Best Buy Exclusive Brands, Environmental Responsibility (SER) program. Through the SER program, we focused on eliminating non-compliance and we work with suppliers on the instilling labor, health and safety and environmental best practices. The program succeeded in helping to build supplier design, production and testing capacity and improve social and environmental performance. For more information about the SER program, please see of our products, and partner the fiscal 2012 Best Buy Sustainability Report. with these suppliers to ensure they meet our expectations for safe, clean workplaces where workers are treated with dignity and respect.
In late 2012, we launched a redesigned approach to supply chain sustainability to improve systems and controls so we can more effectively work with our Exclusive Brands suppliers to increase supply chain transparency, reduce non-compliance and drive continuous improvement.
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01 Supply Chain Transparency
TRANSITIONING TO THE FISCAL 2012 GOAL SUPPLY CHAIN SUSTAINABILITY PROGRAM In the fiscal 2012 Sustainability Report Given the industry evolution in recent years, we sought to design a new program we announced two supply chain goals: that incorporated leading practices and shifted our focus from audits to responsible By the close of fiscal 2013, we would capacity-building and from managing risk to creating sustainable business value. 1. Adopt the EICC’s code, tools and protocol In late fiscal 2012, we joined the Electronic Industry Citizenship Coalition (EICC) and 2. Ensure 100 percent of our non-U.S. based began to transition from our SER program to one based on EICC protocols. EICC suppliers are prepared to convert to an EICC membership includes approximately 80 of the world’s most prominent consumer based program electronics companies. Collectively, we embrace a common supplier code of conduct and audit methodology that create business value by improving working and THE RESULTS: environmental conditions in the supply chain. We officially launched the Supply Chain Sustainability program in Sept. 2012 100 percent of suppliers were prepared to convert to an EICC based program through the following means: Multiple communications to all vendors informing them of the transition and providing guidance on steps they should take to prepare Multiple in-person training sessions on the EICC-based program, including four two-day training sessions dedicated entirely to the new program Translated EICC documents into Mandarin and created new supporting material to help suppliers meet the EICC code
Going forward: By close of fiscal 2014, we will train our suppliers and partners on responsibility reporting and provide tools on the Global Reporting Initiative (GRI), encouraging more transparency in our supply chain.
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01 Supply Chain Transparency
Our conversion to the Supply Chain Sustainability (SCS) program, which is based on Through the SCS program we expect to see deeper engagement with strategic the EICC code, protocol and tools, builds on the strengths of our SER program and suppliers and, over time, improvement as they increase ownership of their reinforces our commitment to seek solutions to current and emerging challenges sustainability practices. In addition, SCS will result in more nimble and streamlined through increased industry collaboration. support for our Global Sourcing and Exclusive Brands teams.
The SCS program incorporates a six-phase approach to code compliance, which retain several steps of the SER program, such as pre-contract audits, capacity building and public reporting.
PHASE 1: CODE INTRODUCTION & ADOPTION PHASE 4: MONITORING
Before working with new suppliers, we provide We perform full audits at high-risk suppliers and in-depth training on our code and program, and validation audits that are used to confirm SAQ and conduct a full audit of their facilities. KPI results at medium-risk suppliers, and identify gaps between suppliers’ performance and the code. PHASE 2: SELF-REPORTING PHASE 5: CAPACITY BUILDING Existing suppliers assess their performance against the code by completing an annual self-assessment We build our suppliers’ capacity so they can close the questionnaire (SAQ) and quarterly key performance gap between their performance and the code. indicator (KPI) reports. PHASE 6: REPORTING PHASE 3: RISK ASSESSMENT Each year we publicly disclose our suppliers’ rate of We evaluate our suppliers’ ability to meet the code, conformance against the code. which guides how we monitor their performance and build their capacity.
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01 Supply Chain Transparency
STAKEHOLDER COLLABORATION OUR APPROACH TO CONFLICT MINERALS In calendar year 2013, the Conflict Minerals law, in the Dodd-Frank Act, which requires Another important industry resource for our company is the Global Social Compliance companies to disclose the source of tin, tungsten, tantalum and gold used in their Program (GSCP), a business-driven coalition of retail companies that seek to harmonize products, went into effect. These conflict minerals are mined in the Democratic Republic supply chain programs. GSCP members, assisted by stakeholders, are developing a of Congo (DRC), where some mines and mining activities are exploited by armed set of reference tools and processes that provide a common interpretation of labor groups, who in turn use the profits to further violence and human rights abuses. and environmental requirements. Through our membership in the GSCP, we hope to become more effective in remediation, capacity building and training. To support the fight against the use of conflict minerals from the DRC, we are a member of the EICC’s Conflict Free Sourcing Initiative and engaged with their Conflict Free Smelter Program. We also play a leadership role in the Retail Industry Leadership Association’s (RILA) Conflict Minerals Working Group. Through these partnerships we have worked to develop educational material for suppliers, engaged stakeholders and conducted pilots to better understand the challenges to identifying the source of conflict minerals.
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02 Audit Results
ASSESSING OUR SUPPLIERS Exclusive Brands SER Factory Audit Program Results
In the third quarter of fiscal 2013, we waived SER audits at our lowest-risk suppliers in FY ‘11 FY ‘12 FY ‘13 order to complete the transition to the SCS program and prepare our suppliers for SCS Factories 145 154 152 audits. Since we moved to the new program, we conducted approximately ten audits Full Factory Audits1 154 160 82 and 16 validation visits to the medium- to high-risk suppliers. The results of these audits are in line with our SER program results. Due to the differing measurement and scoring Terminated Factories 3 0 1 methodology between the two programs, we are limiting our disclosure of audit results Potential New Factories in this year’s sustainability report to the SER program. Starting with our fiscal year 2014 2 5 2 report, we will provide a full account of our suppliers’ SCS audit results. Rejected Based On Initial Audit % of Suppliers That Have 97% 97% 70% Two of the most prevalent issues found during our audits are related to wages and Undergone A Human Rights Audit1 working hours. We take these issues very seriously and instead of relying solely on audits to gather this information, we track wage and working hour information from all of our suppliers on a quarterly basis. We use this information to identify root causes and EXCLUSIVE BRANDS AUDIT RESULTS 2 emerging trends, as well as to engage in conversations, both internally and with factory FY ‘11 FY ‘12 FY ‘13 management, in an attempt to identify solutions. Harassment & Abuse Issues 0% 0% 0%
Health & Safety Issues 13% 16% 18% 1. The percent of suppliers receiving a human rights audit dropped in fiscal 2012 for two reasons; we waived audits at low-risk suppliers during our transition to the SCS program and under the new program, we will focus on medium- and high-risk suppliers. Forced Labor Issues 0% 0% 0% 2. Factory audit results reflect the performance of active factories at the close of fiscal 2013 that manufactured Exclusive Brands product within each fiscal year. Factory audit performance reflects comprehensive audit results Environmental Issues 5% 5% 7% only and does not include findings from follow-up audits. Wage & Compensation Issues 19% 25% 33%
Discrimination Issues 0% 0% 0%
Right To Freely Associate Issues 0% 0% 0%
Working Hours Violations 63% 74% 89%
Child Labor Violations 0% 0% 0%
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Our Vendors VENDORS 03 & Supplier Diversity We see our vendors as partners and work closely with them to move our industry forward. One example is our membership with The Sustainability Consortium (TSC), a multi-stakeholder collaboration whose mission is to design and implement credible, transparent and scalable science-based Sustainability Measurement and Reporting Systems (SMRS) accessible for all producers, retailers and users of consumer products. With the SMRS, companies can improve By collaborating with our the quality of decision making about product sustainability. This enables companies to design better products, vendor partners through effectively manage the sustainability of upstream supplies and suppliers, and communicate product sustainability multi-stakeholder groups and downstream to consumers. fostering relationships with a diverse set of suppliers, we continue to innovate for our industry, and ultimately, our customers.
We participate in three Working Groups:
Electronics Working Group – Focuses on providing credible and scientifically grounded support for communicating the real impacts of all consumer electronics. With a thorough evaluation of consumer electronics throughout the value chain, this sector can make a difference in how users understand the sustainability of their electronics and what that means to society. We hold a co-chair position of this working group.
Retail Working Group – Collaborates with other TSC Sectors to explore ways to improve business-to-business communications, education, and decision making across the supply chain.
Measurement Science Working Group - Establishes scientific methodologies for use by the different TSC Working Groups. The group ensures that the user community has robust methods, data, and tools for the integration of sustainable thinking into everyday business decisions.
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03 Our Vendors & Supplier Diversity
SUPPLIER DIVERSITY Goods Not For Resale Spend Similar to the benefits of employing a diverse workforce, supplier diversity drives innovation. Our supplier diversity program seeks to increase the percentage of spend we allocate to small businesses (as FY ’13 defined by the federal government) and diverse businesses (defined 17% as 51 percent owned and operated by women, minorities, veterans, or gays, lesbians, bisexuals and transgendered people (LGBT)).
FY ’13 Fiscal 2013 highlights: FY ’12 13% We achieved a 17 percent increase in our Goods Not For Resale (GNFR) FY ’12 spend with suppliers that are certified small and a 13 percent increase with suppliers that are certified diverse.1
We received the Corporate Partner of the Year Award from the Women’s Business Development Center, a local nonprofit that certifies and supports women-owned enterprises.
Our employees mentored five women- and ethnic-minority-owned companies to better position them to do business with us, as well as Small Diverse other Fortune 500 companies.
1The scope of our supplier diversity work includes U.S. Goods Not for Resale, which are products and services that we do not sell in our stores (for example, suppliers of Information Technology services, light fixtures, janitorial services, etc.).
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Increase ROIC for investors
Governance Public Stakeholder 01 & Ethics 02 Policy 03 Engagement
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Governance GOVERNANCE ETHICS 01 & Ethics Our corporate responsibility governance structure Our compliance and ethics structure is led by: starts at the highest levels of our company. The Board Chief Compliance Officer: Monitors and addresses of Directors’ Nominating, Corporate Governance enterprise risks in the areas of law and public policy, and Public Policy committee oversees Corporate including corporate governance, environmental Corporate responsibility Responsibility & Sustainability (CR&S). The Board regulation and product safety, among others. begins at the top with a works with our executive leaders in guiding our core group of individuals sustainability strategy. In addition, we have a cross- Chief Risk Officer: Identifies emerging risks, including functional committee of company leaders that dedicated to monitoring risks associated with sustainability, and develops the advise our Corporate Responsibility & Sustainability everything from enterprise risk processes to address those risks. to environmental regulation, programs and initiatives, support integration, set goals and measure results. but it extends far beyond the Chief Ethics Officer: Seeks to help our company confines of the offices of a conduct business in the most ethical manner by few. From officer to entry level, developing business standards, policies and practices every Best Buy employee is that go beyond complying with the law, including such held to the same unwavering issues as bribery, anti-corruption and privacy. Read standards; they are written in more about the Best Buy Code of Business Ethics at our core values, and serve as a BestBuyEthics.com. reminder of their ever-present importance in our personal and professional conduct. It is a responsibility we all share in order to develop more influential leaders, highly trusted employees and a greater, stronger Best Buy.
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Public POLITICAL SPENDING TURN UP THE VOTE 02 Policy The Political Contributions Steering Committee is The Best Buy internal Turn Up the Vote campaign is comprised of five senior executives whose role is to designed to encourage all employees to get involved review and approve corporate funding for political in the electoral process and vote. As a company, contributions of $5,000 or more. We publicly disclose we encourage employees to be engaged in the Our public policy work directly corporate political contributions in our Political Activity communities where we do business and where we aligns with our aspiration to be & Public Policy Report each year. This information live. We provide employees with tools and resources environmentally and socially is reviewed annually by the Nominating, Corporate necessary to vote on Election Day. accountable for our brands Governance and Public Policy Committee and business operations of the Board of Directors. BLUEGRASSROOTS NETWORK worldwide. FAIR COMPETITION At Best Buy, we encourage employees to engage in the political process, both professionally and Best Buy supports federal e-fairness legislation, the personally. The BlueGrassroots Network gives Marketplace Fairness Act, which allows states to apply employees the opportunity to learn about the issues sales tax collection laws fairly to all sellers, regardless impacting our company, form relationships with of their business model. This legislation does not government officials at all levels and promote good represent a new tax, rather it simply helps ensure fair citizenship. Collaboration between our employees and competition that ultimately benefits consumers and elected officials helps bring about change that better our communities. The current laws were put in place serves the communities where we live and work. Our before the Internet or e-commerce even existed. Just public policy work directly aligns with our aspiration as retail has evolved over the years, the tax code needs to be environmentally and socially accountable for our to evolve to reflect modern patterns in how consumers business operations worldwide. shop, not by creating a new tax but by enforcing the laws already on the books. We are encouraged by TO VIEW OUR the bipartisan support the measure has received in Congress so far, and we hope that Congress passes COMPANY POLICIES the Marketplace Fairness Act this year.
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Stakeholder CERES ADVISORY BOARD MULTI-STAKEHOLDER 03 Engagement ORGANIZATION MEMBERSHIPS We have instituted a formal advisory board through Ceres, a U.S. network of socially responsible investment In addition to influencing our overall sustainability companies, environmental organizations and other strategy, stakeholders play a role in shaping our public interest groups that work with companies to annual sustainability report. We have gathered their At Best Buy, we form address sustainability challenges. Through a dialogue recommendations, evaluated them and even modified relationships with the many that includes leaders from across our organization, our communication to improve our sustainability efforts. people and organizations we formally ask for insight and ideas as well as share We are a member of, or collaborate with, that have a stake in what we challenges, opportunities and successes. This has been the following organizations (partial list): do. We interact daily with our a beneficial partnership for us since 2010 and we plan to continue engaging with this group. employees, customers and Sustainability Strategy and Development our communities in a variety The Ceres formal advisory board includes members • Business for Social Responsibility (BSR) of ways. We also work with a from each of these organizations: • Ceres formal stakeholder advisory • The Sustainability Consortium – we co-chair the board to share insights and • Calvert Investments Electronics Sector working group gain an outside perspective • Christian Brothers Investment Services, Inc. • Boston College Center for Corporate Citizenship – on our sustainability efforts. • Electronics TakeBack Coalition we participate on the executive board • Environmental Defense Fund (EDF) • Aspen Institute Business and Society Senior Leaders • National Environmental Education Foundation (NEEF) Forum – we participate on the executive board • Natural Resources Defense Council (NRDC) • Retail Industry Leaders Association (RILA) – we hold a • Pax World Management LLC seat on the Board of Directors • The United Methodist Church, General Board • Consumer Electronics Association (CEA) – we co-chair of Pension and Health Benefits CEA‘s Green Standards and Disclosure Working Group • Verité
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03 Stakeholder Engagement
MEMBERSHIPS CONNECTING WITH CUSTOMERS CONTINUED THROUGH THE CONSUMER INSIGHTS UNIT
Supply Chain Integrity Organizations At Best Buy, we believe our customers are a critical stakeholder. We reach out to our • Electronics Industry Citizenship Coalition (EICC) – we have a seat on the customers and use their feedback to develop technology solutions that matter to them, Board of Directors including solutions that help them live more sustainably. Our Consumer Insights Unit • Global Social Compliance Program (GSCP) (CIU) focuses on gaining insights about customers including information about behaviors, attitudes and values that help us meet their expectations. These insights are shared with Environment leaders across the enterprise to help influence strategic changes in both the customer • Carbon Disclosure Project (CDP) and employee experience. In addition, we connect with our customers through:
• EPA’s Green Power Partnership Our Stores – Blue Shirts (store employees) and Geek Squad Agents are trained to help • National Association of Environmental Managers (NAEM) customers find products and solve their technology challenges. • World Resources Institute’s Customer Consultative Group U.S. Customer Experience Surveys – In early fiscal 2014, we implemented a holistic • U.S. Department of Energy’s Better Building Challenge customer experience survey methodology that incorporates feedback from all of our • EPA’s Smart Way channels including purchasers as well as non-purchasers. These surveys are used Social Change Organizations to gather Net Promoter Score®1, which allow employees to better understand the ® • Boys & Girls Clubs of America (BGCA) differentiation between exceptional and marginal experiences. Our Net Promoter Score has improved since the new methodology began; the greatest improvements have been • Intel Computer Clubhouse Network observed within our services channels and among our store non-purchasers. Our goal is • MOUSE continuous customer experience improvement.
1Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.
Enterprise Customer Care – Customers can contact us when and how they prefer to get the answers they need from 1-888-BEST BUY. In addition, we have chat, email and social media outlets for serving customers’ needs.
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Continue leadership role in positively impacting our world
Helping People U.S. & Global Employee Our Reducing Our 01 Succeed Through 02 Programs 03 Volunteerism 04 Operations 05 Carbon Footprint Technology
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Helping People 01 Succeed Through Technology CHALLENGE: “THE DIGITAL DIVIDE”
According to the Federal Communications Commission (FCC), more than 100 million Americans lack access to broadband service and a home personal computer. As a business we provide technology solutions – not just products While we live in a world – that are tailored to the unique needs of our customers. With technology so ingrained in our society, it is imperative immersed in technology, too that everyone develops 21st-century skills for their future success. We believe we have a responsibility to share our many still lack access. We are knowledge and resources to help more people experience the benefits of technology. We are partnering with the directing our philanthropic FCC and other organizations to tackle this issue. efforts to providing greater access to technological tools, IN FISCAL YEAR 2013 resources and opportunities for teens to succeed Our enterprise-wide donations totaled over $23 million academically and expand future career possibilities.
HELPING TEENS BUILD 21ST CENTURY TECHNOLOGY SKILLS
At Best Buy, we are working to provide greater access to technological tools, resources and opportunities for teens to develop 21st-century technology skills. Research shows that too many teens have little or no access to technology and as a result fall behind their more connected peers. There is also an opportunity for teens who do have access, as they could move beyond passive consumption and engage in the development and creation of media and technology. Our mission is to provide teens opportunities to develop technology skills that inspire future education and career choices.
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U.S. & Global 02 Programs
By aligning our resources with nonprofit organizations, Best Buy is able to support a variety of technology BEST BUY® programs locally and TEEN TECH CENTERS internationally that educate and inspire youth. Best Buy Teen Tech Centers provide a safe place where teens can develop technology skills through hands-on activities such as filmmaking, music production, graphic design, robotics, mobile applications and game development. We are currently piloting this program with nonprofit partners in Chicago, Miami, San Antonio and Minneapolis. We partnered with the Intel Computer Clubhouse Network (ICCN) to assist with program development, support the centers’ staff and monitor results. ICCN is a program of the Museum of Science, Boston with the support of the MIT Media Laboratory and has a 20-year track record serving 25,000 youth annually through 100 clubhouses worldwide.
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02 U.S. & Global Programs
ADDITIONAL U.S. PROGRAMS
Teen Tech Summits Community Grants In fiscal 2013, we created Best Buy Teen Tech Summits – interactive technology Through the Community Grants program, Best Buy retail teams across the U.S. choose workshops. The goal of the events was to expose teens to various technology skills nonprofit organizations within their local communities that help teens develop 21st- and connect them with local nonprofit resources where they can continue to develop century technology skills necessary to excel at school and inspire future career choices. their knowledge. Topics included computer e-cycling, robotics, digital imaging and In fiscal 2013, we gave $2.75 million to more than 500 nonprofits nationwide. music production. The summits were held in conjunction with nonprofit partners in six communities across the country: Houston, Philadelphia, Minneapolis, San Antonio, Connect2Compete San Jose and Washington, D.C. We also help underserved populations gain regular access to the Internet, thereby increasing access to the opportunities that come with it, such as jobs, education and Geek Squad Summer Academy convenience that can enhance a person’s quality of life. C2C is targeting populations Geek Squad Summer Academy (GSSA) is an interactive learning program for young that do not have access to the Internet or the skills to use technology. We partner with people ages 10-18 to develop technology skills and consider technology-based career Connect2Compete, a private and nonprofit sector partnership that promotes broadband paths. We partnered with local nonprofit organizations to host Academies where Geek adoption and digital literacy in disadvantaged communities. The Federal Communications Squad Agents led classes such as computer programming, digital photography, digital Commission (FCC) is leading the effort to bring partners together and ensure that the video and digital music. In fiscal 2013, academies were held across the U.S., and more project meets its goals over time. than 4,700 youth earned Junior Agent certifications. Additional Geek Squad Summer Academies are planned for fiscal 2014.
Joining Forces Geek Squad Agents also conduct Geek Squad Summer Academies as part of the Joining Forces initiative, led by First Lady Michelle Obama and Dr. Jill Biden. The initiative asks Americans to get involved in supporting U.S. troops. Geek Squad Summer Academies support the educational emphasis of the national program by offering customized training to help members of the armed services and their families stay connected via technology. Five of the Geek Squad Summer Academies were held on U.S. military bases in the summer of 2013, with plans to host additional sessions in fiscal 2014.
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02 U.S. & Global Programs
GLOBAL PROGRAMS
Canada’s Future Generation Tech Lab Best Buy Canada and Future Shop awarded 12 high schools grants totaling more than $200,000 to update their technology. Applicants were judged based on the impact of the technology on students’ learning potential.
Best Buy China and Autism Best Buy China has focused its philanthropy efforts on children with autism. These are a few examples of how individual stores and teams are bringing this to life:
During China’s Golden Week, the Five Star Shanxilu store hosted a charity event with popular Chinese DJ, Deng Huang. Proceeds were donated to the Children’s Physiological Research Center of Nanjing Medical University subsidiary hospital for the care of autistic children.
As a part of its Thanksgiving celebration, the Exclusive Brands China office held a fundraiser supporting children’s autism. They sold products featuring artwork created by autistic children, including cell phone cases.
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Employee TAGTEAM AWARDS 03 Volunteerism Last year, more than 18,000 U.S. Best Buy employees volunteered more than 100,000 hours to causes and organizations for which they were passionate. We encouraged their involvement by offering “TagTeam Awards,” a program that gives monetary donations to nonprofit organizations where employees give their time.
Our employees are essential to how we support our communities by generously donating their time and expertise to volunteer and OUR EMPLOYEES VOLUNTEERED building local partnerships. We create opportunities for employees to participate MORE THAN in everything from leading technology workshops at 100,000 Best Buy Teen Tech Summits to responding in times of hours last year disaster. Employees are encouraged to support causes DISASTER RELIEF that are personally rewarding. In fiscal 2013, we developed a comprehensive strategy to leverage products, services and cash donations in response to disasters. We also piloted a program to create and deploy disaster connectivity kits, which included specific technology items such as mobile phone chargers, batteries and flashlights. However, our greatest strength in disaster relief is our ability to mobilize volunteers across the country.
We led community responses to five disasters in fiscal 2013: • Hurricane Isaac • Superstorm Sandy • Northern Minnesota floods • Sandy Hook School tragedy • Colorado wildfires
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Our RESPONSIBLE RECYCLING IN OUR OPERATIONS 04 Operations At Best Buy, we not only help our customers recycle their electronics, we recycle waste created in our own operations as well. Our stores and logistic centers capture, sort and recycle packaging materials such as cardboard, paper, plastic shrink film, bubble wrap and expanded polystyrene. Additionally, our stores and logistics centers either find a second use for or recycle outdated display fixtures and scrap metal as well as retired equipment. Instead of those materials In order to provide an entering the waste stream, we ensure the proper recycling through our approved partners. exceptional customer POUNDS OF MATERIALS RECYCLED experience, we first must FY ‘11 FY ‘12 FY ‘13 (11 MONTHS) ensure our operations are 81.6M sustainable. 78.6M 74.5M Cardboard & Paper 1
Plastic 2 3.5M 3.6M 3.2M Metal 3 1.9M 882K 716K WASTE DIVERSION
We are currently on track to reach 75 percent waste diversion by the end of fiscal year 2014, for all U.S. large format stores and logistics centers. These are the initiatives driving our progress:
• Expanding our recycling capabilities at our retail locations through contract renegotiation • Leveraging our vendor partners to further expand capabilities of recyclable materials • Developing in-house solutions to move current retail waste streams to logistics facilities where they are processed as recyclable commodities
1. Conversion to pounds calculated using short tons. 2. Plastic recycling is from store and distribution center recycling programs and does not include plastic recycled through the appliance or electronics recycling programs. 3. Metal recycling is from project, store and distribution center material only and does not include metal recycled through the appliance or electronics recycling programs.
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04 Our Operations
INNOVATING TO REDUCE WASTE Every employee can make a contribution to the efficiency and sustainability of the REUSABLE BUBBLE WRAP company. The Rapid Appliance Protector (RAP) is an employee invention intended to solve the problem of using disposable packing materials for transporting open-box refrigerators and dishwashers. By creating a re-usable “wrap” for the appliances, we cut down on the cost of bubble wrap, increased the safety of our employees and reduced the amount of plastic entering the waste stream. In fiscal 2013, the RAP program diverted 16 million feet of shrink wrap from entering the waste stream. Every employee can make a contribution to the efficiency and sustainability of the company. OUR RAP PROGRAM
WATER REDUCTION saved 16 million ft. of shrink wrap from entering the waste stream In calendar year 2012, we used about 1.6 million cubic meters of water in our U.S. operations. As with other environmental resources, we seek to minimize our impact through building design, operational monitoring and usage reducing programs.
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Reducing Our 05 Carbon Footprint CHALLENGE: CLIMATE CHANGE
We acknowledge the global challenge of climate change and we are At Best Buy, we are committed to finding cost effective solutions to save energy, which continuously working to make directly reduces emissions of carbon into our atmosphere. In 2009, we our stores more sustainable, set a goal of reducing absolute carbon emissions in North America by increase efficiency within Progress Towards 20 percent by the year 2020 (over our 2009 baseline) — we call it our our supply chain and even Our 20 by 20 Goal “20 by 20” carbon reduction goal. Three years into our effort, we have mitigate our indirect carbon made significant progress and are more than three quarters of the way emissions. toward the achievement of our goal. We were recognized by the Carbon 2009 2010 Disclosure Project (CDP) in both the Carbon Disclosure Leadership Index (CDLI), scoring a 96 for disclosure, and the Carbon Performance 2011 Leadership Index (CPLI), scoring an “A” for performance. The combined score of 96A is tied for the second-highest score among S&P 500 companies, and is the highest combined score among retailers.
Calendar Year 2012 Energy Consumption (C02e):
1 Direct energy consumption by primary energy source : 209 CO2e 1 Indirect energy consumption by primary energy source : 648 CO2e Carbon Emissions Carbon 2012 Over 2009 baseline:
Absolute carbon reduction since goal was set2: 16.8% Energy saved by conservation and efficiency improvements2: 223M kWh Goal 825,364
1. Calendar year 2012 North American operations. 2. Calendar year 2012 North American operations over 2009 baseline.
CORPORATE RESPONSIBILITY & SUSTAINABILITY REPORT FISCAL YEAR 2013 HOME 47 FOR OUR FOR OUR FOR OUR FOR OUR FOR OUR INTRODUCTION CUSTOMERS EMPLOYEES PARTNERS INVESTORS WORLD GRI INDEX
05 Reducing Our Carbon Footprint
HOW STORES REDUCE Dedicated Fleet ENERGY CONSUMPTION We are reducing “empty miles,” (miles driven with no products in the truck), by back- hauling e-waste to the distribution centers, where it is collected by our recycling partners, Across our North American locations, we are reducing energy consumption through or we bring e-waste directly to the recycler. We set a goal to reduce our empty miles by proactive energy conservation measures. Examples include: 1.6 million in fiscal 2013, and we were successful in reducing empty miles by more than 1. We use an integrated Energy Management System, enabling store energy usage 560,000 and continue to focus on driving further reduction. In addition, we require our to be optimized. transportation partners to follow these policies and requirements: 2. We use store temperature controls, allowing the store to shed energy load during 1. Be certified through the EPA’s SmartWay program hours of lower traffic volumes, using a simple switch. 2. Follow the Coalition for Responsible Transportation‘s standards for using certain trucks 3. Through our enterprise energy management platform, we participate in a and engines prescriptive load shedding program called “Demand Response,” reducing lighting 3. Adhere to our “No idling” policy levels and making minor adjustments to HVAC set points. 4. We replace store lighting with energy-efficient LED bulbs when appropriate. Reducing Fuel Used By Geek Squad Vehicles 5. We cool our stores with outside air, generally in early morning hours, called At Best Buy, we closely manage our fleet of more than 4000 vehicles. By using smaller economizer optimization. vehicles as often as possible, and mapping out the most efficient routes to our destinations, we have reduced fleet carbon emissions by 16 percent in fiscal 2013. We are also affiliated with the Department of Energy‘s National Clean Fleets Partnership.
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05 Reducing Our Carbon Footprint
ADDITIONAL CARBON REDUCING ACTIVITIES ISO 14001 CERTIFICATION Intermodal Use We are increasing our use of intermodal transportation, a combination of trucks and To help manage progress toward our environmental goals and ensure compliance, we train versus trucks only. We grew our use of intermodal transportation to 58 percent utilize an ISO 14001-certified Environmental Management System (EMS). The certification, of inbound loads in fiscal 2013 from 54 percent in fiscal 2012. These four percentage awarded in June 2012, covers more than 1000 of our large format stores and distribution points reduced carbon emissions by more than 2500 metric tons. centers in the U.S., making us the first U.S. large-format retailer to earn this certification.
To ensure our environmental programs evolve with our business needs and improve our Designing High-Performance Buildings interaction with the world, we conduct three types of audits: Our High-Performance Buildings program sets the standard for how our stores will be built and remodeled to reduce energy use and improve indoor air quality. We continue 1. A third party conducts audits of our stores for conformance to the ISO 14001 standard to retrofit stores with dimmable fluorescents and skylights, as well as LED focal lighting. and environmental compliance.
Purchasing Renewable Energy Credits 2. We conduct internal audits of our Environmental Management System (EMS) to learn We seek to offset the impact of our emissions in part through the purchase of directly from employees how to continuously improve our environmental performance. renewable energy in the form of Renewable Energy Credits (RECs). RECs advance the 3. We conduct audits of our partners – recyclers, energy providers, etc. output of clean energy facilities, thereby reducing fossil fuel emissions. In calendar year 2012, we offset approximately 12 percent of our U.S. energy through RECs. This is an We believe that investing in this enhanced EMS gives us an objective look at our independent emission reduction effort, which we do not count toward our 20 by 20 operations and a structured framework for continuously improving how we interact with reduction goal (see above). In January 2013, through the EPA‘s Green Power Partnership, the environment. For more information, see our Environmental Policy. we ranked No. 30 overall and No. 8 among retailers.
Scope 3 Emissions Measuring, managing and mitigating greenhouse gas emissions are not limited to our facilities. In fact, there are significant impacts to consider even before the product reaches our doors and after it leaves our stores. As we continue to decrease our direct carbon footprint, at the same time we are identifying relevant indirect categories – like business travel, employee commuting, upstream transportation and the use of sold products – to develop programs that reduce our indirect carbon footprint. We believe that a comprehensive approach is essential for our communities, customers and the environment – just another step forward in our journey to make a positive impact on the world.
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GRI Index
INDICATOR DESCRIPTION SECTION Strategy and Analysis 1.1 Statement from the most senior decision-maker of the organization Introduction 1.2 Description of key impacts, risks and opportunities Introduction Organization Profile 2.1 Name of the organization Introduction 2.2 Primary brands, products and/or services Introduction 2.3 Operational structure of the organization, including main divisions, operating companies, subsidiaries and Introduction joint ventures 2.4 Location of organization’s headquarters Introduction 2.5 Number of countries where the organization operates, and names of countries with either major operations or that Introduction are specifically relevant to the sustainability issues covered in the report 2.6 Nature of ownership and legal form 2013 Annual Report (10-K) 2.7 Markets served Introduction 2.8 Scale of reporting organization Introduction 2.9 Significant changes during the reporting period regarding size, structure or ownership About This Report 2.1 Awards received in the reporting period Introduction Report Parameters 3.1 Reporting period for information provided Introduction 3.2 Date of most recent previous report About This Report 3.3 Reporting cycle About This Report 3.4 Contact point for questions regarding the report or its contents About This Report 3.5 Process for defining report content About This Report 3.6 Boundary of the report About This Report 3.7 State any specific limitations on the scope or boundary of the report About This Report 3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities Introduction that can significantly affect comparability from period to period and/or between organizations 3.9 Data measurement techniques and the bases of calculations, including assumptions and techniques About This Report underlying estimations applied to the complilation of the Indicators and other information in the report 3.1 Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such n/a re-statement
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3.11 Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied About This Report in the report 3.12 Table identifying the location of the Standard Disclosures in the report About This Report 3.13 Policy and current practice with regard to seeking external assurance for the report About This Report Governance, Commitments and Engagement 4.1 Governance structure of the organization, including committees under the highest governance body responsible For Our Investors/Governance for specific tasks, such as setting strategy or organizational oversight & Ethics 4.2 Indicate whether the Chair of the highest governance body is also an executive officer 2013 Proxy Statement 4.3 For organizations that have a unitary board structure, state the number and gender of members of the highest 2013 Proxy Statement governance body that are independent and/or non-executive members 4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest 2013 Proxy Statement governance body 4.5 Linkage between compensation for members of the highest governance body, senior managers and executives, 2013 Proxy Statement and the organization’s performance 4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided 2013 Proxy Statement 4.7 Process for determining the composition, qualifications, and expertise of the members of the highest governance 2013 Proxy Statement body and its committees, including any consideration of gender and other indicators of diversity 4.8 Internally-developed statements of mission or values, codes of conduct, and principles relevant to economic, www.bestbuyethics.com environmental, and social performance and the status of their implementation 4.9 Procedures of the highest governance body for overseeing the organization’s identification and management of 2013 Proxy Statement economic, environmental and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed upon standards, codes of conduct and principles 4.1 Process for evaluating the highest governance body’s own performance, particulary with respect to economic, Each committee chair conducts environmental and social performance and annual, formal evaluation of their committee, and every year the Nominating Committee chair conducts an evaluation of the full Board. Results are compiled, compared to results of the prior four years, and assessed. Goals and opportunities are identified for ongoing focus throughout the year. 4.11 Explanation of whether and how the precautionary approach or principle is addressed by the organization We do not currently apply the Precautionary Principle in our organization.
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4.12 Externally developed economic environmental, and social charters, principles, or other initiatives to which For Our Customers/A Global the organization subscribes or endorses Responsibility 4.13 Memberships in associations and/or national/international advocacy organizations For Our Investors/Stakeholder Engagement 4.14 List of stakeholder groups engaged by the organization For Our Investors/Stakeholder Engagement 4.15 Basis for identification and selection of stakeholders with whom to engage For Our Investors/Stakeholder Engagement 4.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group For Our Investors/Stakeholder Engagement 4.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organization has For Our Investors/Stakeholder responded to those key topics and concerns, including throught its reporting Engagement Economic EC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, Introduction donations and other community investments, retained earnings, and payments to capital providers and governments EC2 Financial implications and other risks and opportunities for the organization’s activities due to climate change For Our World/Reducing Our Carbon Footprint EC3 Coverage of the organization’s defined benefit plan obligations Our Employees/Learning, Development and Rewards EC8 Development and impact of infrastructure investments and services provided primarily for public benefit For Our World/Helping People through commercial, in-kind or pro bono engagement Succeed Through Technology Environmental EN3 Direct energy consumption by primary energy source For Our World/Reducing Our Carbon Footprint EN4 Indirect energy consumption by primary source For Our World/Reducing Our Carbon Footprint EN5 Energy saved due to conservation and efficiency improvements For Our World/Reducing Our Carbon Footprint EN6 Initiatives to provide energy-efficient or renewable energy-based products and services, and reductions in For Our Customers/Helping energy requirements as a result of these initiatives Customers Choose Sustainable Products EN7 Initiatives to reduce indirect energy consumption and reductions achieved For Our World/Reducing Our Carbon Footprint EN8 Total water withdrawal by source For Our World/Our Operations EN16 Total direct and indirect greenhouse gas emissions by weight For Our World/Reducing Our Carbon Footprint
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EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved For Our World/Reducing Our Carbon Footprint EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation For Our Customers/Helping Customers Choose Sustainable Products EN29 Significant environmental impacts of transporting products and other goods and materials used for the For Our World/Reducing Our organization’s operations, and transporting members of the workforce Carbon Footprint Social: Labor Practices and Decent Work LA1 Total workfoce by employment type, employment contract, and region, broken down by gender Introduction LA11 Programs for skills management and lifelong learning that support the continued employability of employees For Our Employees/Learning, and assist them in managing career endings Development and Rewards LA13 Composition of governance bodies and breakdown of employees per employee category according to gender, For Our Employees/A Culture age group, minority group membership, and other indicators of diversity of Diversity & Inclusion Social: Human Rights n/a HR2 Percentage of significant suppliers, contractors and other business partners that have undergone human rights For Our Partners/Audit Results screening and actions taken HR4 Total number of incidents of discrimination and actions taken For Our Partners/Audit Results HR5 Operations and significant suppliers identified in which the right to exercise freedom of association and For Our Partners/Audit Results collective bargaining may be violated or at significant risk, and actions taken to support these rights HR6 Operations and significant suppliers identified as having significant risk for incidents of child labor, and For Our Partners/Audit Results measures taken to contribute to effective abolition of child labor HR7 Operations and significant suppliers identified as having significant risk for incidents of forced or compulsory For Our Partners/Audit Results labor, and measures to contribute to the elimination of all forms of forced or compulsory labor HR10 Percentage and total number of operations that have been subject to human rights reviews and/or For Our Partners/Audit Results impact assessments Social: Society SO5 Public policy positions and participation in public policy development and lobbying For Our Investors/Public Policy SO6 Total value of financial and in-kind contributions to political parties, politicians and related insitutions by country Political Activity & Public Policy Report Social: Product Responsibility PR1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and For Our Customers/Helping percentage of significant products and services categories subject to such procedures Customers Choose Sustainable Products PR5 Practices related to customer satisfaction For Our Investors/Stakeholder Engagement
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